Picture by reverb
I started thinking about the issue of how you should be allowed to pay for purchases recently after the fairly intense debate over Woolworths' decision to stop accepting debit credit cards. Clearly, the big issue there was that customers felt Woolworths was forcing them to pay extra costs simply to buy goods — a bad idea for any retailer.
However, tied in with those arguments was the notion that if a customer wants to pay, a retailer is obliged to accept that payment method. As one reader put it:
Woolworths is in the wrong for not accepting a credit facility your card has a right to use.
Or as another asked:
Doesn't Australian law say that you can't artificially limit payment options in this way?
Similar questions sometimes arise about Tiger Airways, which only takes credit card payments:
Tiger Airways refuse cash for purchases; are they allowed to refuse currency of the realm?
While there apparently isn't a lot of actual case law on this issue, the reality is that a business can set itself up to accept whatever payment methods it chooses. If you don't want to pay using that method, you can of course take your business elsewhere, but you haven't got grounds for legal action. In reality, few businesses choose to operate that way, precisely because it does annoy customers so much, but it doesn't give you grounds for complaint.
Some payment decisions can become more complicated: eBay's attempts to make PayPal the sole payment method available to buyers faltered on anti-competitive grounds, and the auction giant is now planning to expand its options. However, that was a more complex decision in which choice of payment methods intersected with other issues such as its dominant position in the marketplace.
Indeed, the Reserve Bank points out that in the strict sense, businesses aren't even obliged to accept a cash payment. In a page dedicated to the topic on its site, it says:
It is the Reserve Bank of Australia’s understanding that, although Australian currency has legal tender status, it does not necessarily have to be used in transactions and that refusal to accept payment in legal tender banknotes and coins is not unlawful.
The same page also has a handy guide to just how much small change you're obliged to accept in payment as a business (assuming you're generally willing to accept cash). The rule is actually pretty simple: up to $5 in total for coins smaller than 50 cents, and not exceeding 10 times the face value for coins worth more than that. Again, that doesn't mean businesses can't accept larger amounts of change, but they can't argue that those amounts aren't legal tender.
Lifehacker's weekly Loaded column looks at better ways to manage (and stop worrying about) your money.